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Apollo Sindoori Hotels Ltd.

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Apollo Sindoori Hotels Ltd. (APOLSINHOT) - Director Report

Company director report

to the Shareholders

Your Directors are pleased to present the Eighteenth Annual Report on the business andoperation of the Company together with the Audited Financial Statements for the year endedMarch 31 2016.

1. Corporate Overview

Apollo Sindoori is a leading hospitality service management and support servicescompany. We manage the entire gamut of hospitality services right from food services tokitchen planning and management. Apollo Sindoori has built its heritage by combining itsCorporate and Professional process with experience and expertise in Catering andHospitality. We strive constantly to achieve “Excellence in Hospitality”. Managementdiscussion and analysis report has been given separately.

2. Operations / State of the Company's Affairs

Your Company's turnover has gone from Rs.97 Crores to Rs.132 Crores flaunting ahealthy growth of 36%. This growth in challenging circumstances is a testimony to therobustness of your Company's business strategy and innovative service offerings thathelped capture new markets.

Your Company's Profit Before Tax & Extraordinary item for 2015-16 is Rs.144.16 Lacsas compared to Rs.343.34 Lacs for the financial year 2014-15. PAT decreases to Loss ofRs.242.20 Lacs as compared with Profit of Rs.231.23 Lacs for the last financial year. Thedecrease in PAT was due to increase in the employees cost and other overhead Expenditure.

Financial Highlights: (Standalone)

(Rs. in Lacs)

Details 2016 2015
Income:
Income from sale 13182.58 9637.03
Other Income 108.96 63.86
Total Income 13291.54 9700.89
Expenditure:
Less: Employee Cost & other expenses 12992.83 9289.11
Profit before Depreciation Interest and Taxation 298.71 411.78
Less: Depreciation 78.34 45.96
Interest 76.19 22.48
Profit for the year before Extraordinary Item and Tax 144.16 343.34
Less: Extraordinary Item 480.22 -
Profit for the year before Tax (336.06) 343.34
Less: Provision for Tax - Current Tax - 99.00
Deferred tax (net) (93.84) 13.11
Net Profit for the year after tax (242.20) 231.23

Consolidated turnover has gone from Rs. 141 crores to Rs. 186 crores and Profit beforeTax & Extraordinary item also has gone from Rs.6.74 crores' 6.80 crores

3. Dividend

Your Directors did not recommend any dividend to equity shareholders of the company dueto loss incurred by the Company for the financial year 2015-16.

4. Transfer to Reserves

The Company does not propose to be transferred out of the current profits/losses to theGeneral Reserve.

5. Fixed Deposits

The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the balancesheet.

6. Listing

The Company was exclusively got listed on National Stock Exchange after Madras StockExchange closed down its operation. Accordingly the Shares of the Company were listed onNational Stock Exchange of India Limited Mumbai. The Company has also paid listing feesto National Stock Exchange for the financial year 2016-17.

7. Share Capital

The paid up equity share capital as on March 31 2016 was Rs.1 30 02000/-. Duringthe year under review your Company did not issue shares with differential voting rights /sweat equity.

8. Significant or Material Orders Passed By regulators/Courts

During the year under review there were no significant or material orders passed bythe regulators or courts or tribunals impacting the going concern status and Company'soperations in future.

9. Material Changes and Commitment affecting Financial Position of the Company

There are no material changes and commitments affecting financial position of theCompany which has occurred between the end of the financial year of the Company i.e.March 312016 and the date of the Directors' Report.

10. Corporate social responsibility

With the enactment of the Companies Act 2013 and the Companies (Corporate SocialResponsibility) Rules 2014 read with various clarifications issued by the Ministry ofCorporate Affairs every Company having the net worth of Rs.500 crores or more or turnoverof Rs. 1000 crores or more or net profit of Rs.5 crore or more during any financial yearhave to spend at least 2% of the average net profit of the Company made during the threeimmediately preceding financial years.

Accordingly the provisions of CSR activities under Companies Act 2013 do not apply toyour company.

11. Corporate Governance

Compliance with the provisions of under Regulation 27(2) of SEBI (Listing Obligations& Disclosures Requirement) Regulation 2015 shall not apply to your company as paid upequity share capital not exceeding Rs.10 Crores and Net Worth not exceeding Rs.25 Croreas on the last day of the previous financial year as per circular of SEBI bearing numberCIR/CFD/POLICY CELL/7/2014 dated 15th September 2014 and as per Regulation15(2 ) SEBI (Listing Obligations & Disclosures Requirement) Regulation 2015.

12. Joint venture Company/Associates

Faber Sindoori Management Services Private Limited

Apollo Sindoori Hotels entered into an MOU dated July 14 2006 with Faber Medi-ServeSDN. BHD (“FMS”) whereby FMS and Apollo Sindoori Hotels have agreed to form ajoint venture company in Chennai for the purpose of setting up a project upon mutuallyagreed objectives in the domain of bio-medical engineering (maintenance) facilityengineering (maintenance) cleansing HousekeepingJanitorial Services and Hospitalsupport services (other than catering services) and management information services (otherthan patient information). It was agreed that FMS would hold 51% of the proposed JointVenture Company while Apollo Sindoori Hotels would hold 49%.The said Joint VentureAgreement was entered into between FMS and Apollo Sindoori Hotels on June 25 2007 wherebyamongst other terms it was recorded that a private limited company with the name“Faber Sindoori Management Services Private Limited ” would be incorporated on27/08/2007.

13. Subsidiary

Company has no subsidiary as on the date of this Balance Sheet.

14. Consolidation of Accounts

Your Company has prepared Consolidated Financial Statements in accordance withAccounting Standard 21 - “Consolidated Financial Statements” prescribed underSection 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules2014. The Consolidated Financial Statements reflect the financial position of the Companyand Associates. As required by Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (hereinafter referred to as Rs.SEBI(LODR)Regulations 2015Rs.) the Audited Consolidated Financial Statements together with theIndependent Auditor's Report thereon are annexed and form part of this Annual Report.

15. Related Party Transaction

All related party transactions that were entered into during the financial year were onan arm's length basis and in the ordinary course of business. All the related partytransactions are preapproved by the Audit Committee. In view of this disclosure in formAOC-2 has not been provided as the same is not applicable to the Company. During the yearthe Company has not entered into any contract/arrangement with related parties which couldbe considered materially significant related party transactions. The details of thetransaction with Related Party are provided in the accompanying financial statements.

16. Extracts of Annual Return

The details forming Part of the Extracts of Annual Return is annexed as per Annexure'A'.

17. Composition of Board

The Board comprised with optimum combination of Executive and Non- Executive Directors.Board has One Executive Director Three Non-Executive Director and Three IndependentDirector duly appointed as per the Provisions of the Companies Act 2013.

18. Board Meetings and other Committee Meetings

The Board of Directors met 5 times during the period April to March in the year 2015-16on the following dates:

1.29th May 2015

2. 12th August 2015

3. 13 th November 2015

4. 24th December 2015

5. 12th February 2016

During the year Four Audit Committee Meetings One Nomination & RemunerationCommittee Meetings and one Independent Directors Meeting were also held.

19. Composition of Audit Committee

The Board has constituted an Audit Committee which comprises of Mr. G. Venkatraman asthe Chairman and Mr. Suresh R Madhok Mr. George Eapen as the Members. More details aboutthe Committee are given in Annexure Rs.B Rs..

20. Disclosure of Information as required under section 134 (3) (m) of the CompaniesAct 2013 (ACT) read with the companies (Accounts) Rules 2014

(i) Conservation of Energy

The Company values the significance of conservation of energy and hence continuousefforts are made for judicious use of energy at all levels of operations by utilisingenergy efficient systems and processes. Towards achievement of this objective steps havebeen initiated including use of energy efficient LED lights and energy management systemsat our kitchen/offices. Further certain initiatives are being implemented foroptimisation of electricity and LPG usage.

Some of the actions planned for next year include replacement of energy intensive pumpswith high efficiency systems replacement of energy intensive fans with energy efficientfans. Operational measures include close monitoring and control of energy consumption andfrequent energy audits by the hotel Engineering Department.

Your Company remains focused on giving importance towards conservation of energy whichresults in savings of electricity consumption a significant component of the energy costin an ongoing process.

(ii) Technical Absorption

The Company continues to absorb and upgrade modern technologies and advanced hotelmanagement techniques in various guest contact areas which includes wireless internetconnectivity in all the Guest House.

(iii) Foreign Exchange Earnings and outgo

As required under Section 134(3) (m) of the Companies Act 2013 the informationrelating to foreign exchange earnings and outgo is hereunder.

Particulars March 31 2016 (Rs.) March 31 2015 (Rs.)
Used 778104 1473846
Earned Nil Nil

21. Insurance

All insurable interests of the Company including buildings furniture and fixtures andother insurable interest are adequately insured.

22. Auditors

(i) . Statutory Auditors

M/s R. Subramanian and Company LLP Chartered Accountants Auditors of the Companyhold office until the conclusion of this AGM. They are eligible for re- appointment andhave given their consent for re-appointment. Company has received a certificate underSection 139 from the retiring auditors regarding their eligibility for re-appointment asthe Company's Auditors for the financial year 2016-17.

The Board of Directors recommend the re appointment of M/s R. Subramanian and CompanyLLP as the Auditors of the Company for 2016-2017 to hold office till the conclusion ofthe next AGM.

(ii) . Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act 2013 and The Companies(Accounts) Rules 2014 the Company has appointed M/s. Kolath & Co CharteredAccountant as an Internal Auditors to undertake the Internal Audit of the Company w.e.f.1st October 2015

(iii) . Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companyhas appointed Mr.Gouri Shanker Mishra Company Secretary in Practice to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewithas Annexure 'C'. With respect to the observation made in the secretarial audit report

1. Secretarial Standard has not been followed properly for Board and Committee Meeting.

2. Few e-forms have been belatedly filed.

3. The majority of the revenue of the Company is from related party transaction whichas per the representation from the Company is in ordinary course of business and on armslength basis.

4. Company was not required to comply with the Corporate Governance requirement as setout in Clause 49 of the Listing Agreement based on Circular of SEBI CIR/CFD/POLICYCELL/7/2014 dated 15th September 2014 and as per Regulation 15(2) of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.

5. Company has compounded offence for belated filing of form INV-5 for unclaimeddividend and deposits for the financial year ended 31st March 2013.Apart from the aboveobservation there are no qualifications reservations or adverse remarks made by Mr.Gouri Shanker Mishra Practicing Company Secretary Secretarial Auditors of the Company intheir secretarial audit report.

Reply to Secretarial Auditor Observation:

1. With regard to secretarial standard company have followed majority of secretarialstandard during the year under review and by oversight we have missed certain standards.We ensure that it will be follow fully in future.

2. Due to oversight the filing of few e-forms belatedly and in future the same will befiled without any delay.

3. All other observations are self-explanatory and no need to provide any reply on thatobservations.

23. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an internal Control System commensurate with size scale andcomplexity of its operations. The scope and authority of the internal Audit function iswell defined in the organization. To maintain its objectivity and independence theinternal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control systems in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalAudit function process owners undertake corrective action in their respective areas andthereby strengthen the control. Significant audit observations and corrective actionssuggested are presented to the Audit Committee of the Board.

24. Directors' Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their Knowledge and ability confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed;

(b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31 March 2016 and of the profit of theCompany for the year;

(c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) The Annual Accounts are prepared on a going concern basis;

(e) They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively;

(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and these systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultant(s) and the reviews made by the Management andthe relevant Board Committees including the Audit Committee and the Board is of theopinion that the Company's internal financial controls were adequate and operationallyeffective during the financial year 2015-16.

25. DIRECTORS SEEKING FOR RE-APPOINTMENT:

In terms of the provisions of Section 152 (6) (d) of the Companies Act 2013 Mrs.Sindoori Reddy (DIN00278040) director of the Company retire by rotation at this AnnualGeneral Meeting as per the provisions of the Articles of Association of Company and beingeligible for reappointment offer herself for re-election.

The brief resume of the director proposed to be appointed and re-appointed and otherrelevant information have been furnished in the Notice convening the AGM. Appropriateresolution for the appointment/re-appointment is being placed for approval of the membersat the AGM. The board therefore recommends their re-appointment as Director of theCompany.

26. INDEPENDENT DIRECTORS DECLARATION:

All Independent Directors have given their declarations that they meet the criteria ofindependence as laid down under Section 149(6) ofthe Companies Act 2013.

27. APPOINTMENT OF KEY MANAGERIAL PERSONNEL:

During the Year the Board appointed Mr.C.Natarajan as Chief Executive Officer Mr.K.B.S. Manian as Chief Financial officer and Mr.Prakash Chandra Panda as CompanySecretary and Compliance officer of the Company with effect from 2ndMay 201624th December 2015 and 2ndMay 2016 respectively and thoseappointment was made under the section 203(1) (Appointment of Key Managerial Personnel's)of the Companies Act 2013.

28. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

29. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to Section 177(9) and (10) of the Companies Act 2013 the Company shallestablish a vigil mechanism for the directors and employees to report genuine concerns insuch manner as may be prescribed.

The Vigil (Whistle Blower) Mechanism aims to provide a channel to the Directors andemployees to report genuine concerns about unethical behaviour actual or suspected fraudor violation of the Codes of Conduct or policy.

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations and in order to maintain these standards the Companyencourages its employees who have genuine concerns about suspected misconduct to comeforward and express these concerns without fear of punishment or unfair treatment.

The mechanism provides for adequate safeguards against victimization of Directors andemployees to avail of the mechanism and also provide for direct access to the Chairman ofthe Audit Committee in exceptional cases. The said Whistle-Blower Policy has been hostedon the website of the Company at http://apollosindoori.com/pdf/policy2.pdf

30. BOARD EVALUATION

Pursuant to the Provisions of the Companies Act 2013 the Board has carried out anAnnual Performance Evaluation of its own performance and that of its committees andDirectors individually.

31. Human Resources

Your Company takes pride in the commitment competence and dedication shown by itsemployees in all areas of its business. It considers people as its biggest assets. It hasput concerted efforts in talent management and succession planning practices strongperformance management and learning and training initiatives to ensure that your Companyconsistently develops inspiring strong and credible leadership. Your Company has astructured induction process at all its locations and management development programs toupgrade skills of managers.

32. Comments on auditors' report

No Qualification has given by Statutory Auditors in their Report.

33. Particulars of Employees

The ratio of the remuneration of each director to the median employees' remunerationand other details in terms of Section 197(12) of the Act with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (“theRules”) forms a part of this Annual Report as Annexure 'D'

The Company had one employee who were employed throughout the year and were in receiptof Remuneration more than Rs. 60 Lacs Per Annum. In terms of Section 136 of the Act thecopy of the financial statements of the Company the auditor's report and relevantannexures to the said financial statements and reports are being sent to the Members andother persons entitled thereto excluding the information in respect of the said employeescontaining the particulars as specified in Rule 5(2) of the said Rules which is availablefor inspection by the Members at the Company's Registered Office during business hours onworking days of the Company up to the date of the ensuing Annual General Meeting. If anyMember is interested in obtaining a copy thereof he may write to the Company Secretary ofthe Company at its Registered Office. The financial statements reports etc. of theCompany are available on the website of the Company www.apollosindoori.com The Company has about 3990employees in its roll. Since employees contribute in achieving the goal of the Companyperiodical training programs are carried out to meet the challenges in providing servicesto the best of customer satisfaction.

34. Sexual Harassment of Women at Workplace (prohibitionprevention and redressal) Act2013

The Company has a Policy on Prohibition Prevention and Redressal of Sexual Harassmentof Women at Workplace and matters connected therewith or incidental thereto covering allthe aspects as contained under the Sexual Harassment of Women at Workplace (ProhibitionPrevention and Redressal) Act 2013. During the year under review the Company has notreceived any complaints under the Policy.

35. Investors Education and Protection Fund (IEPF)

Details of IEPF has been given in the notice attached to this Annual Report.

Acknowledgement

Your Directors take this opportunity to thank the Company's customers ShareholdersSuppliers Bankers Financial Institutions and the Central and State Governments for theirunstinted support. The Directors would also like to place on record their appreciation toemployees at all levels for their hard work dedication and commitment.

For Apollo Sindoori Hotels Ltd.
Sucharitha Reddy G. Venkatraman
Managing Director Director
Place: Chennai
Date: 29.07.2016

ANNEXURE-D

I. Information to be furnished as per Rule 5 of Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is as under:

i The percentage increase in remuneration of each Director Chief Financial Officer andCompany Secretary during the financial year 2015-16 ratio of the remuneration of eachDirector to the medias remuneration of the employees of the Company for the financial year2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:

(Rs. In Lacs)

S. no Name of Directors/KMP and Designation Remuneration of Directors/ KMP for financial year 2015-16 % increase in Remuneration in the Financial Year 2015-16 Ratio of remuneration of each Director/ to median remuneration of employees Comparison of the Remuneration of the KMP against the performance of the Company
1 Mrs. Sucharitha Reddy Managing Director 12.00 7.45

Profit Before Tax and Extraordinary items was Rs. 144.16 Lacs for the financial year 2015-16

2 Mr.KBS Manian Chief Financial Officer 6.68

-

4.15
3 Mr.Ramakrishnan Chief Financial Officer 16.86 23% 8.87
4 Mr.Sathishkumar Company Secretary 5.40 - 3.36

ii. The median remuneration of employees of the Company during the financial year2015-16 was Rs.1.60 Lakh.

iii. In the financial year there was an increase of 22% in the median remuneration ofemployees.

iv. There were 3990 employees which includes the permanent staff FTC'sContracted/outsourced staff/Deputed staff as on March 312016.

v. Relationship between average increase in remuneration and company performance:-

The average increase in median remuneration was in line with the performance of theEmployee and market condition.

vi. Remuneration of the key Managerial Personnel(s) was increased as per marketcondition:

a.The total remuneration of the Key Managerial Personnel increased (44.6%) fromRs.26.52 Lacs to Rs.38.35 Lacs in 2015-16.

vii. Variations in the market capitalization of the Company. The marketcapitalization as on March 31 2016 was Rs.2821.43 lakhs in comparison to previous yearended31.03.2015 was Rs.2657.60Lakhs.

viii. Price Earnings ratio of the Company was-11.85% as on March 31 2016 in comparisonto Price Earnings ratio of the Company was 11.50% as on March 31 2015.

ix. Present increase over/decrease in the market quotations of the shares of thecompany as compared to the rate at which the company came out with the last public offerin the year.

The Company has not made any public offer till date since its incorporation. Itsshares were listed on Stock Exchanges due to order of the Madras High Court dated April16 2000 a scheme of arrangement between Apollo Hospitals Enterprise Limited and OmSindoori Hotels Limited a company engaged in the hoteling and travel agency business inChennai was approved. The said scheme recorded that the said businesses of Om SindooriHotels Limited would be taken over by the company as a going concern. The name of thecompany was thereafter changed to “Apollo Sindoori Hotels Limited” on October10 2000.

x. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theNomination and Remuneration Committee(NRC) as per the Remuneration Policy for DirectorsKey Managerial Personnel and other Employees.

xi. The ratio of the remuneration of the highest paid director to that of the employeewho are not directors but receive remuneration in excess of the highest paid directorduring the year -Mr.S.T.Nithyanandam - Chief Operating Officer receive remuneration inexcess of the highest paid director during the year ended 31/03/2016.

xii. It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employee.

II. Remuneration to Non-Executive Directors:

The Board on the recommendation of the NRC shall review and approve the remunerationpayable to the NonExecutive Directors of the Company within the overall limits approved bythe shareholders.

Non-Executive Directors shall be entitled to sitting fees for attending the meeting ofthe Board and the Committee thereof.

III. Remuneration to other employees;

Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be based on various factors such as job profile skill setsseniority experience and prevailing remuneration levels for equivalent jobs.

IV. NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES

PRINCIPLE AND RATIONALE

Section 178 of the Companies Act 2013 require the Nomination and RemunerationCommittee of the Board of Directors of every listed entity among other classes ofcompanies to

- formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration for the directors key managerial personnel and other employees.

- identify persons who are qualified to become directors and who may be appointed insenior management in accordance with the criteria laid down recommend to the Board theirappointment and removal.

- carry out evaluation of every director's performance.

- formulate the criteria for evaluation of Independent Directors and the Board.

Accordingly in adherence to the above said requirements and in line with the Companyphilosophy towards nurturing its human resources the Nomination and RemunerationCommittee of the Board of Directors of Apollo Sindoori Hotels Limited herein belowrecommends to the Board of Directors for its adoption the Nomination and RemunerationPolicy for the directors key managerial personnel and other employees of the Company asset out below:

COMPANY PHILOSOPHY

Apollo Sindoori is an equal opportunities employer. The organization does notdiscriminate on grounds of age gender colour race ethnicity language caste creedeconomic or social status or disability. The global workforce spread across continentswhich has over the years transformed Apollo Sindoori into a global organisation forms thebackbone of the entity. Pay revisions and other benefits are designed in such a way tocompensate good performance of the employees of the Company and motivate them to do betterin future.

Employee recognition schemes in the form of ESOPs/ ESPS have also been introduced assuccessful tools in acknowledging their contribution and making them partners in thewealth created by Apollo Sindoori.

The endeavour of the organisation is to acknowledge the contributions of its directorskey managerial personnel and other employees with best compensation and benefits thatappropriately reward performance in line with the regulatory and industry best practices.

GUIDING PRINCIPLES

In the formulation of this Policy the Nomination and Remuneration Committee has alsoendeavored to ensure the guiding principles as prescribed u/s 178(4) of the Companies Act2013 summarized hereunder:

a) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate human resource including directors of the quality required to run thecompany successfully;

b) relationship of remuneration to performance is clear and meets appropriateperformance benchmarks;

c) remuneration to directors key managerial personnel and senior management reflectingshort and long term performance objectives appropriate to the working of the company andits goals;

d) facilitating effective shareholder participation in key Corporate Governancedecisions such as the nomination and election of board members;

e) aligning key executive and board remuneration with the longer term interests of thecompany and its shareholders;

f) ensuring a transparent board nomination process with the diversity of thoughtexperience knowledge perspective and gender in the Board.

NOMINATION OF THE DIRECTORS

The Nomination and Remuneration Committee of the Board of Directors is dedicated toensuring the continuance of a dynamic and forward-thinking Board and recommend to theBoard qualified candidates for directorship.

Before recommending a nominee's candidature to the Board for being appointed as aDirector the following criteria set out may be applied as guidelines in consideringpotential nominees to the Board of Directors.

General Criteria

-The background and qualifications of the Directors considered as a group shouldprovide a significant breadth of experience knowledge and abilities to assist the Boardin fulfilling its responsibilities.

- Directors should be selected so that the Board of Directors should remain as adiverse body with diversity reflecting gender ethnic background country of citizenshipand professional experience. Because a mix of viewpoints and ideas enhances the Board'sability to function effectively the Committee shall consider the diversity of theexisting Board when considering potential nominees so that the Board maintains a body ofdirectors from diverse professional and personal backgrounds.

- Potential nominees shall not be discriminated against on the basis of race religionnational origin sex disability or any other basis prohibited by law.

- Any nominee should be free of any conflict of interest which would violate anyapplicable law or regulation or interfere with the performance of the responsibilities ofa director.

- Commitment of the nominee to understanding the Company and its industry embracingthe organisation's values to help shape its vision mission and strategic directionincluding oversight of risk management and internal control.

- Commitment of the nominee to spending the time necessary to function effectively as aDirector including attending and participating in meetings of the Board and itsCommittees.

Specific Criteria

- Demonstrated business acumen experience and ability to use sound judgment and tocontribute to the effective oversight of the business and financial affairs of a largemultifaceted global organisation.

- The nominee reflects the right corporate tone and culture and excels atboard-management relationships.

- Experience in strategic planning and managing multi-disciplinary responsibilitiesthe ability to navigate among diverse professional groups and points of view a trackrecord of communicating effectively in a global environment and high standards ofintegrity and professional conduct.

- Nominees understand and endeavour to balance the interests of shareholders and/ orother stakeholders and put the interests of the company or organisation aboveself-interest. He/ she has demonstrated a commitment to transparency and disclosure.

- He/ she is committed to superior corporate performance consistently striving to gobeyond the legal and/or regulatory governance requirements to enhance not just protectshareholder value.

- Nominee contributes to effective governance through superior constructiverelationships with the Executive Directorate and management.

REMUNERATION OF THE DIRECTORS

The Company strives to provide fair compensation to directors taking intoconsideration industry benchmarks Company's performance vis-a-vis the industryresponsibilities shouldered performance/track record macro conomic review onremuneration packages of heads of other organisations.

The remuneration payable to the directors of the company shall at all times bedetermined in accordance with the provisions of the Companies Act 2013.

Appointment and Remuneration of Managing Director and Whole-time Director

The terms and conditions of appointment and remuneration payable to a Managing Directorand Whole-time Director(s) shall be recommended by the Nomination and RemunerationCommittee to the Board for its approval which shall be subject to approval by shareholdersat the next general meeting of the Company and by the Central Government in case suchappointment is at variance to the conditions specified in Schedule V to the Companies Act2013. Approval of the Central Government is not necessary if the appointment is made inaccordance with the conditions specified in Schedule V to the Act.

In terms of the provisions of Companies Act 2013 the Company may appoint a person asits Managing Director or Whole-time Director for a term not exceeding 5 (Five) years at atime.

The executive directors may be paid remuneration either by way of a monthly payment orat a specified percentage of the net profits ofthe Company or partly by one way and partlyby the other.

The break-up of the pay scale performance bonus and quantum of perquisites includingemployer's contribution to P.F. pension scheme medical expenses club fees etc. shall bedecided and approved by the Board on the recommendation of the Committee and shall bewithin the overall remuneration approved by the shareholders and Central Governmentwherever required.

While recommending the remuneration payable to a Managing/Whole-time Director theNomination and Remuneration Committee shall inter alia have regard to thefollowing matters:

Financial and operating performance of the Company Relationship between remunerationand performance Industry/ sector trends for the remuneration paid to executive directorateAnnual Increments to the Managing/ Whole-time Director(s) shall be within the slabsapproved by the Shareholders.

Increments shall be decided by the Nomination and Remuneration Committee at times itdesires to do so but preferably on an annual basis.

Insurance Premium as Part of Remuneration Where any insurance is taken by a company onbehalf of its Managing Director Whole-time Director Manager Chief Executive OfficerChief Financial Officer or Company Secretary for indemnifying any of them against anyliability in respect of any negligence default misfeasance breach of duty or breach oftrust for which they may be guilty in relation to the company the premium paid on suchinsurance shall not be treated as part of the remuneration payable to any such personnel.

However if such person is proved to be guilty the premium paid on such insuranceshall be treated as part of the remuneration.

Remuneration of Independent Directors

Independent Directors may receive remuneration by way of

Sitting fees for participation in the Board and other meetings Reimbursement ofexpenses for participation in the Board and other meetings Commission as approved by theShareholders of the Company

Independent Directors shall not be entitled to any stock options.

Based on the recommendation of the Nomination and Remuneration Committee the Board maydecide the sitting fee payable to independent directors. Provided that the amount of suchfees shall not exceed the maximum permissible under the Companies Act 2013.

Remuneration to Directors in other Capacity

The remuneration payable to the directors including Managing or Whole-time Director orManager shall be inclusive of the remuneration payable for the services rendered by him inany other capacity except the following:

(a) the services rendered are ofa professional nature; and

(b) in the opinion of the Nomination and Remuneration Committee the director possessesthe requisite qualification for the practice of the profession.

EVALUATION OF THE DIRECTORS

As members of the Board the performance of the individual Directors as well as theperformance of the entire Board and its Committees is required to be formally evaluatedannually.

Section 178(2) of the Companies Act 2013 also mandates the Nomination and RemunerationCommittee to carry out evaluation of every director's performance.

In developing the methodology to be used for evaluation on the basis of best standardsand methods meeting international parameters the Board / Committee may take the advice ofan independent professional consultant.

appropriate and balanced remuneration package.

The annual increments to the remuneration paid to the employees shall be determinedbased on the annual appraisal carried out by the HoDs of various departments.

Decisions on Annual Increments shall be made on the basis of this annual appraisal.

GENERAL

This Policy shall apply to all future employment of Company's Senior Managementincluding Key Managerial Personnel and Board of Directors.

Any or all the provisions of this Policy would be subject to the revision/ amendment inthe Companies Act 2013 related rules and regulations guidelines and the ListingAgreement on the subject as may be notified from time to time. Any such amendment shallautomatically have the effect of amending this Policy without the need of any approval bythe Nomination and Remuneration Committee and/or the Board of Directors.

NOMINATION AND REMUNERATION OF THE KEY MANAGERIAL PERSONNEL (OTHER THAN MANAGING/WHOLE-TIME DIRECTORS) KEY-EXECUTIVES AND SENIOR MANAGEMENT

The executive management of a company is responsible for the day to day management of acompany. The Companies Act 2013 has used the term “key managerial personnel” todefine the executive management.

The KMPs are the point of first contact between the company and its stakeholders. Whilethe Board of Directors are responsible for providing the oversight it is the keymanagerial personnel and the senior management who are responsible for not just layingdown the strategies as well as its implementation.

The Companies Act 2013 has for the first time recognized the concept of Key ManagerialPersonnel. As per section 2(51) “key managerial personnel” in relation to acompany means:

(i) the Chief Executive Officer or the Managing Director or the Manager;

(ii) the Whole-time Director;

(iii) the Chief Financial Officer;

(iv) the Company Secretary; and

(v) such other officer as may be prescribed.

Among the KMPs the remuneration of the CEO or the Managing Director and the Whole-timeDirector(s) shall be governed by the Section on REMUNERATION OF THE DIRECTORS of thisPolicy dealing with “Remuneration of Managing Director and Whole-time Director”.

Apart from the directors the remuneration of

- All the Other KMPs such as the company secretary or any other officer that may beprescribed under the statute from time to time; and

- “Senior Management” of the Company defined in the Listing Agreement withthe Stock Exchanges i.e. personnel who are members of its core management team excludingthe Board of Directors.

Senior executives one level below the Board i.e. President cadre shall be determined bythe Human Resources Department of the Company in consultation with the Managing Directorand/ or the Whole-time Director (Finance).

The remuneration determined for all the above said senior personnel shall be in linewith the Company's philosophy to provide fair compensation to key - executive officersbased on their performance and contribution to the Company and to provide incentives thatattract and retain key executives instill a long-term commitment to the Company anddevelop a pride and sense of Company ownership all in a manner consistent withshareholder interests.

The break-up of the pay scale and quantum of perquisites including employer'scontribution to P.F. pension scheme medical expenses club fees etc. shall be decided bythe Company's HR department.

Decisions on Annual Increments of the Senior Personnel shall be decided by the HumanResources Department in consultation with the Managing Director and/ or the Whole-timeDirector (Finance) of the Company.

REMUNERATION OF OTHER EMPLOYEES

Apart from the Directors KMPs and Senior Management the remuneration for rest of theemployees is determined on the basis of the role and position of the individual employeeincluding professional experience responsibility job complexity and local marketconditions.

The Company considers it essential to incentivize the workforce to ensure adequate andreasonable compensation to the staff.The Human Resources Department shall ensure that thelevel of remuneration motivates and rewards high performers who perform according to setexpectations for the individual in question.

The various remuneration components basic salaryallowances perquisites etc. may becombined to ensure an